All eyes have been on Paris since merger talks between Franco-German EADS and the UK’s BAE Systems became public, with the British side claiming their French counterparts were the most likely block to a deal.
But even though some French government officials remain deeply unconvinced by the deal’s merits – and the country’s potential loss of influence over EADS – there is a grudging admission that it is not necessarily doomed to failure.
“I really don’t think it’s a good idea for industrial reasons, more than anything. I’m not sure about BAE’s US business,” says a senior French defence official. “But it is going to be difficult to oppose politically.”
That chimes with the view of Tom Enders, the German EADS chief executive, who has gambled that the deal will be backed by his French and German stakeholders.
Pierre Moscovici, France’s finance minister, has made public his need to be convinced about “the strategic interest of a merger, the industrial effect, possible synergies, the governance of the entity, the future of our defence industry and employment”.
But public opinion has been suprisingly muted, suggesting the EADS executives have – so far at least – managed to make the right kind of noises about protecting tens of thousands of French jobs and Toulouse-headquarted Airbus, the jewel in France’s industrial crown.
The merger has been largely ignored by the non-business press, or consigned to small slots on inside pages, in marked contrast to the high level of interest across the Channel.
While French officials stress that they are not the only ones to meddle in EADS’s affairs, pointing to German protests about Mr Enders shifting its headquarters to Toulouse, they also accept that Paris is indeed the biggest potential stumbling block.
Extracting a coherent view from the French is made more complicated by the fact that François Hollande, the Socialist president, exerts a far looser grip on his ministers than Nicolas Sarkozy, his hyperactive right-of centre predecessor.
“Much more than during the time of Sarkozy, ministers will be able to have their say on this topic,” says the defence official.
As several people close to EADS say, the deal would not have been allowed by Mr Sarkozy because of his ties to Dassault, the French domestic rival to EADS.
Jean-Yves Le Drian, defence minister, is thought to be at least sympathetic to the logic of a deal. But Mr Moscovici has not shown great enthusiasm, while Arnaud Montebourg, the leftwing industry minister, is a protectionist wild card.
Nevertheless, the feeling in Paris is that if German officials sign up then their French counterparts could follow. That said, there are mutters about whether Mr Enders is backed fully by Angela Merkel, the German chancellor.
There is also the possibility of raising about €3bn from the sale of France’s diluted 9 per cent stake in a merged BAE-EADS, useful as it tries to find more than €30bn of austerity savings. Though people involved in the talks have indicated that Paris may want to keep the holding.
In common with other state actors in the negotiations, Paris is reluctant to be seen as the one spoiling the party. But it could put an effective stop to the deal by dragging its feet and making excessive demands, “as we did when we wanted to stay out of Eurofighter”, the official says.
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